MP Sues Foreign Oil Companies Over Local Content

The Member of Parliament for Obuasi West, Hon Kwaku Kwarteng and Development Data (a policy research organisation) have filed a writ at the fast track high court to compel Total, Vivo Energy, Oando and Engen to have the 50% Ghanaian ownership required by law. The four foreign-owned oil marketing companies have been buying and selling fuel in Ghana in spite of the licensing requirement that any company operating in fuel retail business should have at least 50% Ghanaian Also cited in the suit is the National Petroleum Authority, the national regulator of the petroleum download industry. In the writ, the complainants have accused the regulator of failure to enforce its own requirements against these offending foreign-owned companies. In many countries, the petroleum retail sector is the exclusive preserve of local people. In Ghana however, the licensing regime allows foreigners to do business in petroleum retailing but are obliged to partner Ghanaians in doing so. According to the complainants, the four foreign-owned companies have failed to comply with this requirement, and are therefore praying the court to compel the companies to cede 50% of their shareholding to Ghanaians. The complainants are further challenging the lawfulness of NPA�s �no objection� to the takeover of Shell Ghana by Vivo Energy earlier this year, since Vivo Energy did not have the requisite 50% Ghanaian ownership. The outcome of this case could have a revolutionary effect on the petroleum retail sector of Ghana since many of these foreign companies have access to cross subsidization opportunities from their controlling parent companies. This could allow them to dominate the market and give them an unfair advantage that will eventually push indigenous Ghanaian retailers out of business. Lawyer for the complainants is the renowned Mr Alexander Abban of Akufo-Addo, Prempeh and Co chambers. Hearing will begin next week.